House prices continue to rise but at slower rate, index shows

HOUSE prices continued to increase in July but at a much slower level, the latest edition of the permanent tsb House Price Index shows.

Prices increased by 0.4% in July, bringing to 6% the hike in prices since January, compared with 5.9% for the corresponding period in 2001.

Compiled in association with the ESRI, the index confirms the view that the rate of house-price growth continues to moderate.

Figures for May and June were only slightly higher at 0.5%, compared with 2.9% in April. It also compares with a rise in prices of 1.8% in March of this year. In July 2001 prices rose by 1%.

The index also reveals that in the 12 months to July, national house prices rose by 4.5%, reflecting the relatively large monthly increase in July 2001. This compares with growth rates of 4.9%, 5% and 5.2% in the 12 months to April, May and June 2002 respectively.

“Following a very buoyant start to the year when house-prices growth started strongly, there is now a clear trend emerging of a moderation in price increases,” said permanent tsb marketing general manager, Niall O’Grady.

Dublin house prices rose by 0.5% in July 2002 as did the price of houses bought outside Dublin city. The corresponding growth rates for the month of June 2002 were 2% and -0.3% respectively. For July 2001 the respective growth rates were 0.8% and 1.7%.

The average price paid for a house in Dublin in July was 252,548 while the equivalent price for a house outside Dublin was 169,385. The equivalent prices in July 2001 were 241,484 and 161,868.

For the month of July prices increased by 0.4% both for first-time buyers and second-time buyers. In June the comparative price increases were -0.1% for first-time buyers and 1.0% for second-time buyers.

The average price paid by a first-time buyer and a second-time buyer in July 2002 was 169,259 and 216,684 respectively. The equivalent prices in July 2001 were 162,871 and 208,477.

The July year-on-year growth rate for both first-time and second-time buyers was 3.9%.

For the month of July prices grew by 0.8% for secondhand houses, while new house prices actually fell by 0.3%. This compares with increases in June this year of 0.3% for new houses and 1.2% for secondhand houses.

The July year-on-year growth rates for new and secondhand houses were 2.4% and 4.9% respectively. The year-on-year figure measures the rise in house prices over the 12 months from the beginning of August 2001 to end-July 2002.

The average price paid for a new house in July 2002 was 191,142, while that paid for a secondhand house was 196,230. The equivalent prices in July 2001 were 186,643 and 187,053.

Permanent tsb is the bank formed by the merger of Irish Permanent and TSB Bank. The permanent tsb House Price Index has replaced the Irish Permanent House Price Index.

The index is widely regarded as the most credible measure of house price movements in the country. Permanent tsb accounts for over one in four new mortgages in Ireland.

Paying through roof

* The price of a new house in July 2002 was 191,142,

* A second-hand house was 196,230.

* The equivalent prices in July 2001 were 186,643 and 187,053 respectively.